The city, with the help of hired legal guns, has sent to Superior Court Judge Richard Strauss its responses in the lawsuit that could force the city to make a $175 million payment into its retirement fund.
Strauss said the city would forfeit its right to defend city employee William McGuigan’s lawsuit if the city continued to delay its response to the admissions the ex-employee sought. McGuigan wanted the city to agree that it had underfunded its pension system for the past decade, breached its fiduciary duty, hid its actual pension deficit from the public, and lured the retirement board to go along with the underfunding by increasing employee benefits.
The judge said he simply wanted the city to admit or deny the claims McGuigan made.
City Attorney Mike Aguirre had made very similar (and sometimes, exactly the same) claims in his investigatory reports and malpractice lawsuits against former consultants. Several council members criticized Aguirre for making those claims because they felt it opened the city up to litigation like McGuigan’s.
In its response, the city denied 30 of those statements, but admitted to five of them. The five admissions are all related to what city law mandates, while the denials are more subjective deal and with opinions on whether the city’s past practices violated those laws.
June 16 is scheduled to be the case’s day of judgment.